CIRED
21st International Conference on Electricity Distribution
Frankfurt, 6-9 June 2011
Paper 1186
COMMERCIAL ARRANGEMENTS TO FACILITATE ACTIVE NETWORK
MANAGEMENT
Robert CURRIE
Smarter Grid Solutions – UK
[email protected]
Bryan O’NEILL
Smarter Grid Solutions – UK
[email protected]
Colin FOOTE
Smarter Grid Solutions – UK
[email protected]
Alan GOODING
Smarter Grid Solutions – UK
[email protected]
Robert FERRIS
Central Networks – UK
[email protected]
Jeff DOUGLAS
Central Networks – UK
[email protected]
ABSTRACT
Active Network Management (ANM) is concerned with the
real-time control of energy producing and consuming
devices to maintain electricity networks within acceptable
operating parameters. ANM is being deployed in the UK to
facilitate increased connection of renewable generators to
the existing grid and avoid or defer associated network
reinforcement. ANM also provides a means of maximising
the use of network infrastructure and can be an
economically preferable connection solution for users of
the network.
This paper will build upon the state of the art in terms of
deployed ANM schemes, academic literature and industry
reports, to identify the range of Principles Of Access (POA)
that could be implemented in an ANM scheme. The key
stakeholders in an ANM deployment will be identified and
used to inform a set of criteria for assessing POA options.
A simplified multi-criteria assessment of each POA option
is then presented from the perspective of the stakeholders.
The assessment is subjective based on engineering
judgement with a view to promoting discussion.
Recommendations are presented, based on the assessment
undertaken and discussions with industry partners, which
are relevant to Governments, regulators, network operators
and users of the network.
INTRODUCTION
Generator or demand participants in an ANM scheme
accept that they will be controlled by the ANM scheme
when network constraints are breached. There are a number
of different ANM schemes emerging that manage thermal,
voltage and fault level constraints. Central Networks has
deployed dynamic line ratings in the Skegness Registered
Power Zone (RPZ) [1] and Scottish Hydro Electric Power
Distribution and Smarter Grid Solutions have deployed
ANM technology in the Orkney RPZ [2]. However, there
are few examples of deployed ANM schemes elsewhere at
the present time. When more than one device is being
controlled to manage one or more network constraints, POA
must be considered. POA are the commercial rules that
govern the operation of an ANM scheme.
Paper No 1186
POA define the relationships between generators, demand
customers and the constraints that are managed on the
network (either transmission or distribution) within the
terms of interruptible contracts. For example, POA define
the relationship or connection priority of generators
connected to the same grid zone, contributing to one or
more network constraints. In this case, POA essentially
specify the manner in which to curtail generators and define
the operational rules applied by the ANM scheme to
maintain the network within safe operating limits.
STAKEHOLDERS & ASSESSMENT CRITERIA
The implementation of a POA approach has the potential to
impact on all parts of the electricity supply chain. The key
stakeholders in the electricity supply chain include:
•
Regulators (e.g. Ofgem in the UK)
•
Transmission System Operators
•
Distribution Network Operators
•
Generator Developers
•
Load Customers
•
Investors
Any POA assessment criteria must consider the technical,
commercial and regulatory strengths of each approach. A
relevant range of assessment criteria has been identified by
ESB National Grid in Ireland [3]. It has been considered
that an ANM scheme and the accompanying POA employed
must:
•
Contribute to a Safe, Secure and Reliable Power
Network
•
Be Equitable and Transparent
•
Support Efficient Network Operation
•
Be Sustainable and Future Proof
•
Not Impact On Existing Connection Agreements
•
Apply to all Network Operating States
•
Comply with Relevant Laws, Standards and Codes
PRINCIPLES OF ACCESS
The University of Durham has undertaken an assessment of
POA options in a recent publication [4] and ESB National
Grid in discuss these issues in light of operational rules to
curtail wind generation [3]. The POA options are
summarised below.
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CIRED
21st International Conference on Electricity Distribution
Frankfurt, 6-9 June 2011
Paper 1186
payment. Alternatively, generators may offer a price to be
curtailed with a market mechanism to proportion
curtailment accordingly.
Last In First Out
This POA curtails the last generator added to the ANM
scheme first. Adding a new generator connection to the
Last In First Out priority list (in the position of least
priority) does not alter the priority position of existing
generator units with interruptible contracts.
Technical Best
A Technical Best POA aims to curtail the generators in
order of contribution to the prevailing constraint or based
on which generator(s) response characteristics are deemed
best for meeting the prevailing constraint. This may vary
for different types of constraints and network
configurations.
Generator Size
This POA curtails the largest generator that is contributing
to a constraint first. The total amount of curtailment
required to alleviate a constraint is allocated in order of
size. Generator Size may refer to the installed rated
capacity of the generator unit or the power output at any
given time when constraints arise.
Most Convenient
The POA based on Most Convenient allows system
operators to curtail the generator they know to be the most
convenient for responding to network constraints. This
assessment may be influenced by system operator (or
control room engineer) preference.
Greatest Carbon Benefit
This POA aims to minimise the carbon emissions associated
with actively managed generation by curtailing the largest
carbon emitting generators first. Based on a carbon metric
such as CO2/MWh per generator the network operator
could prioritise generation.
INITIAL ASSESSMENT
Table 1 documents the initial assessment of the POA
options against the criteria. From Table 1 it can be seen that
all POA meet the following criteria:
•
Contribute to a Safe, Secure and Reliable Power
•
Network
•
Comply with Relevant Laws, Standards and Codes
•
Apply to all Network Operating States
Based on an initial pass/fail assessment, Table 1 presents
three POA options that are not considered feasible: Most
Convenient, Technical Best and Generator Size. These POA
do not meet the Equitable and Transparent Criteria set out
previously.
Shared Percentage
The Shared Percentage POA divides the required
curtailment equally between all generators contributing to
the constraint. The total amount of curtailment would be
shared by each of the generators based on the ratio of rated
or actual generator output to total required curtailment.
Market Based
Under a Market Based POA, generators with interruptible
contracts could pay for access to the network for a period
and capacity allocated to those offering the highest
Last In
First Out
Generator
Size
Greatest
Carbon
Benefit
Market
Based
Shared
Percentage
Technical
Best
Most
Convenient
PASS
FAIL
FAIL
PASS
PASS
FAIL
FAIL
PASS
FAIL
PASS
PASS
FAIL
FAIL
FAIL
PASS
PASS
PASS
PASS
PASS
PASS
PASS
FAIL
FAIL
FAIL
FAIL
FAIL
PASS
PASS
PASS
FAIL
FAIL
PASS
FAIL
FAIL
FAIL
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS/FAIL
PASS Count
6
4
4
6
4
4
4
FAIL Count
1
4
4
1
3
3
3
Be Equitable and
Transparent
Be Sustainable and
Future Proof
Contribute to a Safe,
Secure and Reliable
Power Network
Support Efficient
Network Operation
Impact On Existing
Connection
Agreements
Apply to all Network
Operating States
Comply with
Relevant Laws,
Standards and
Codes
Table 1: POA Options Vs Assessment Criteria
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CIRED
21st International Conference on Electricity Distribution
Frankfurt, 6-9 June 2011
Paper 1186
Transparency is required at all levels of the electricity
industry to ensure no individual or company is receiving
unfair competitive advantage or disadvantage [5]. It is
judged that the three POA options identified above may
unfairly discriminate against certain types of generators
based on their location, control room preference and the
size of the generator.
It is clear from Table 1 that the top two POA options are
Last In First Out and Market Based. Although Shared
Percentage scores lowly, it is recommended that this POA
is explored further as in theory it could be combined with
other POA options to add flexibility. For example, to
consider multiple generator units to be equal in terms of
access to available network capacity. The fairness of this
approach meets the criteria of regulator making it worthy
of further consideration.
Greatest Carbon Benefit is inherently discriminatory
against high carbon emitting generators. However, this
approach promotes current government and European
energy policy [6, 7] and therefore has been included for
further assessment.
The careful design of the implementation strategy for this
POA could address some of the areas in which this POA
failed. For this reason, Greatest Carbon Benefit will be
considered further.
FURTHER ANALYSIS
Each of the POA options which passed the initial
assessment has been subject to further analysis which aims
to identify any barriers to implementation (commercial or
technical) and the potential risks to stakeholders.
Last In First Out
The simplicity of the Last In First Out POA philosophy
ensures it is transparent to all network stakeholders and
achieves consistency for both existing generation units and
new generation units by not impacting on their connection
agreements. This de-risks the interruptible contract for the
investor as the long-term impact of curtailment can be
modelled based on a fixed position in a priority stack for
access to capacity.
There are no foreseeable problems in the short-term with
either regulation or legal compliance. An ANM scheme
operating a ‘Last In First Out’ POA methodology is
currently in operation in the UK as part of the Orkney RPZ.
A ‘Last In First Out’ POA philosophy does not
differentiate between low carbon sources and carbon
intensive sources; therefore, energy produced by renewable
sources could be curtailed ahead of non-renewable sources.
This POA could also limit the technical utilisation of the
distribution network.
Shared Percentage
A ‘Shared Percentage’ POA philosophy is favourable from
the perspective of the majority of the stakeholders
identified and does not require regulatory change to
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implement. The simplistic rule of dividing curtailment
evenly between all constraint contributing generators
ensures fair access to available network capacity for
multiple generators, satisfying the fairness and competition
goals of the regulators.
The main issue with the implementation of this POA is that
it is difficult for investors to assess the long-term impact of
the interruptible contract on the business proposition.
Under Shared Percentage, the generator that is the first unit
to connect would experience increasing curtailment as
additional interruptible generator units connect. The extent
of potential further units wishing to connect to an area of
constrained network cannot be forecast and therefore could
introduce a potentially significant barrier to raising project
finance. This could be addressed by some form of
constraint payment, but such a mechanism does not
typically exist at the distribution level at the present time.
Market Based
A Market Based solution meets the assessment criteria in
that it will not impact on existing connections and is
sustainable and future proof providing a suitable market
can be established. A Market Based POA philosophy
would require the development of a market (or regularly
agreed bi-lateral contracts) for implementation.
Significant effort would be required to deploy this POA,
including the implementation of a market clearing and
settlement system.
One significant advantage of this approach is the potential
to extend the market to incumbent connectees satisfying the
fairness and competition goals of regulators. However, due
to the localised nature of constraints this approach is
probably more suited to wider transmission system
constraints than distribution networks.
Greatest Carbon Benifit
Adopting the Greatest Carbon Benefit POA could
essentially result in the implementation of a CO2/MWh
priority stack for individual generator units (as in Last In
First Out) or shared access rights for a number of
generators utilising the same primary fuel source (whether
renewable or not - as in Shared Percentage). Therefore,
Greatest Carbon Benefit is not expected to be complex to
implement from a technical perspective but significant
thought will need to be given to the commercial
implications of implementing such an approach.
Determining the real carbon footprint of each generation
technology in a clear, open and fair manner is not a simple
task. However, a simple approach could involve banding
of generator types, similar to the approach adopted in the
Renewables Obligation in the UK.
Regulatory intervention would be required to implement
Greatest Carbon Benefit on its own or in conjunction with
another POA option; therefore it cannot be considered as a
short or medium-term POA option.
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CIRED
21st International Conference on Electricity Distribution
Frankfurt, 6-9 June 2011
Paper 1186
RECOMMENDATIONS FOR PRINCIPLES OF
ACCESS
In order to support the rollout of ANM technology and
facilitate the role of the network operator in the transition
to the Low Carbon Economy, SGS and Central Networks
recommend taking a phased approach to implementing the
best PoA options identified in this paper. These
recommendations are broken down across the short-term
(0-5 years), medium-term (5-10 years) and long-term
horizons (10+ years), as shown in Figure 1.
In the short-term, Shared Percentage and Last In First Off
can be implemented separately or together in a combined
approach without significant regulatory or industry change.
These PoA options may facilitate a significant increase in
the capacity for new connections to existing distribution
networks in the next five years. Further work and industry
discussion is required to determine the specifics of
implementing standard business processes to enable such
arrangements, while providing flexibility for the DNO and
certainty for the generator developer. However, this is not
expected to present a significant barrier to the short-term
implementation of these PoA. Indeed, Last In First Out has
already been implemented in the Orkney RPZ by SGS and
SHEPD.
Figure 1: Principles of Access Recommendations
In the medium-term, it is recommended that a MarketBased PoA approach is considered.
Significant
development work is required to define the scope and
operation of such a localised market. Trials of such an
approach would represent a significant development in the
global power sector. Lessons learned from such trials
could be applied to create local markets to facilitate the
increased connection of other low carbon technologies,
such as electric vehicles.
In the long-term, if the goal is to maximise the use of
renewable energy sources and other low carbon
technologies across the supply chain then Greatest Carbon
Benefit should ultimately be pursued. This will require
significant regulatory and market reform, the discussion of
which falls out with the scope of this paper.
CONCLUSIONS
Interruptible contracts will form the basis for the
deployment of ANM technology to facilitate the increased
Paper No 1186
connection of low carbon technologies.
The adoption of the Last In First Out and Shared
Percentage POA is recommended in the short-term. These
POA options are implementable today and do not require
new technology or changes to the existing regulatory
environment. It is expected that these two POA options
will be implemented together and separately and will
remain valid over the medium and long-term.
A Market Based approach to POA will require a significant
effort to deploy, but is perhaps most suitable for
transmission system constraints where a larger number of
customers can participate. Trials of such an approach in
the short-term will provide significant learning to the
industry and inform the debate regarding the access of
other low carbon technologies to the network. Such
advances will require significant regulatory change.
In the long-term, the Greatest Carbon Benefit POA will
deliver increased decarbonisation of the electricity sector.
Trials of such an approach are complex, impacting all
across the supply chain and at different levels in the
electricity networks. Such an approach will require end-toend thinking, considering the needs of all network users,
technologies and the wider system impacts of low carbon
technology adoption, including system balancing and
security of supply.
To conclude, this report has provided a concise overview
of this complex and emerging area. Further exploration
and debate is required to validate the observations made
and take recommendations forward.
REFERENCES
[1] Central Networks; “Regulatory Report for DG
Incentives”, Registered Power Zones & Innovation
Funding Incentive Report, Regulatory Year 2008/09”
[2] R. A. F. Currie, G. W. Ault, C. E. T. Foote, N. M.
McNeill and A. K. Gooding; “Smarter Ways to Provide
Grid Connections for Renewable Generators”; IEEE
General Meeting, Minneapolis, July, 2010.
[3] ESB National Grid; “Options for Operational Rules to
Curtail Wind Generation”; Document Code CER/04/247,
2004
[4] S. Jupe, P. Taylor and A. Michiorri; “Coordinated
output control of multiple distributed generation schemes”,
IET Renewable power generation, 2010, Vol. 4(3), pp. 283
– 297.
[5] http://ec.europa.eu/energy/gas_electricity/
consultations/doc/2010_07_23/cesr_ergeg_market_abus
e.pdf
[6] Department for Energy and Climate Change, HM
Government; “The UK Low Carbon Transition Plan:
National Strategy for Climate and Energy”; 2009
[7] DIRECTIVE 2009/29/EC OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL of 23 April
2009 amending Directive 2003/87/EC, available online:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=
OJ:L:2009:140:0063:0087:en:PDF
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